For the Quarter Ending June 2022
North America
Butanediol prices in Q2 2022 first increased and then decreased. The seesawing trend showed by the prices of Butanediol in the US market due to the double shock of Covid-19 and the Russian-Ukraine war and high inflation rates pose a significant threat of stagflation to many countries worldwide. The prospect of stagflation is alarming because there are few ways to tackle the issue. Butanediol prices have risen in the United States as solvent prices have risen globally, with Petrochemicals futures up by 13% in May. Furthermore, Since the US imposed sanctions in March, American refineries have stopped welcoming tanker ships laden with Russian oil, creating an imbalance in the market of crude derivatives. Recent supply chain problems have compounded the country's pricing crisis. The prices offered at FOB Texas for 1,4-Butanediol were assessed at USD 5725/MT in June, showcasing a month-on-month inclination of 3%.
APAC
Butanediol prices have been plummeting in China over the last quarter, leaving no opportunity for negotiation. The volume of trade and shipping is therefore decreasing. The supply of BDO in the Chinese mainland gradually resumes at the beginning of March. BDO plants are currently operating at an overall rate of more than 75%. Units from Shaanxi Ronghe and Xinjiang Tianye has restarted in May. Butanediol has majorly experienced a downward sentiment in the Chinese market this quarter due to the fluctuations in global crude oil prices, which significantly increased the cost of raw materials and has supported BDO price declines on the domestic market. Prices of Butanediol Spot Ex-Qingdao, which were settled at about USD 3289/MT in the week ending July 1, fell by roughly 2%.
Europe
Butanediol prices soared in the UK market during the third week ending June, owing to a regional supply constraint. However, demand from end-user industries, including medicines and solvents, remained robust, owing to increased panic buying by downstream consumers concerned about inventory shortages. With disrupted supply chains, countries like the United States, the United Kingdom, and the eurozone are already seeing record-breaking inflation rates. High freight expenses along multiple trade routes continued to impact Butanediol supplies across Europe and Southeast Asia, increasing prices. On the other side, major butanediol producers, including Ashland and LyondellBasell, have been continuously raising their prices in Europe and other countries since the beginning of the year. DDP Immingham offers for 1,4-Butanediol settled at USD 7163/MT, indicating a rise of 2% monthly.
For the Quarter Ending March 2022
North America
In the North America, the prices of Butanediol continued to increase since the beginning of Q1 of 2022. This rise was attributed to the strong demand from the derivative segments including Tetrahydrofuran and Polybutylene Terephthalate and PTMEG industry along with increased consumption in the downstream paints and coatings industry across the region. The global BDO, PTMEG and Spandex market witnessed modest growth in the United States. The continuing solid demand from downstream sectors and the PTMEG and PBAT resin markets remained another factor for price increments. Furthermore, upstream Crude oil volatility amidst the Russia-Ukraine war had a significant impact on pricing. In addition, with effect from January 1st, Ashland, a key player in the global market, has increased the pricing for all grades of BDO in the North American region the January 2022. The most recent estimate for March prices was USD 5510 per metric ton FOB Texas.
Asia Pacific
During the first quarter of 2022, 1,4-Butanediol prices remained on an upward trajectory, similar to the previous quarter, as freight rates throughout the world reached new highs, affecting BDO supply as solvents in the region. Traders were increasing the price of their products at significant rates in response to apparent downstream demand in order to profit from the worsened supply shortfall. Because of strong purchasing sentiment and substantial demand from the downstream Polytetramethylene Ether Glycol (PTMEG) and Polybutylene Terephthalate (PBAT) industries, India's Butanediol (BDO) prices remained strong this quarter. It has been observed that the price of upstream crude oil has risen, and factories have begun to feel the pinch of higher input costs. BDO FOB Qingdao offers have risen to USD4420/MT, extending strong gains during the Chinese Lunar New Year, while bulk BDO Ex-Mumbai offers have settled at USD6209/MT.
Europe
Butanediol prices in Germany were strong throughout Q1, but they showed mixed tendencies in the previous quarter. The price increase was caused by increased demand for the commodity from downstream derivative makers. BDO had been on an upward trajectory as supply restrictions in the international market in the United States and China increased, hitting Germany and the European region. Because downstream PBAT resins and PTMEG makers felt the squeeze of dwindling supply, they boosted their offerings. Domestic production in the Germany during Q1 has fallen by a large amount year on year. Furthermore, pharmaceutical, and solvent demand has been strong and persistent, driving up prices. The ongoing geopolitical issues between Russia and Ukraine, on the other hand, have put pressure on upstream commodities, affecting the value chain. According to BASF, improved consumption from the downstream Polyurethanes and pharmaceuticals sectors pushed prices for 1,4-Butanediol Ex-Karlsruhe to USD 6945/MT in March.
For the Quarter Ending December 2021
North America
During Q4 2021, the price of Butanediol (BDO) in North America increased exponentially due to increased demand from downstream sectors and supply constraints caused by a raw material scarcity. During the fourth quarter of 2021, Ashland and several other major companies raised pricing on 1,4-butanediol (BDO) and many derivative commodities. The most recent estimate for December prices was USD 4160 per metric ton FOB Texas.
Asia
Global producers such as Ashland, Mitsui, and BASF have raised their product pricing in Asia, driving up the cost of imports in the Indian market. As a result, the BDO price increased dramatically and was heard hovering around INR 465220/MT Ex-Mumbai in December. On the demand side, consumption for BDO remained steady from the downstream THF and PU sectors throughout this timeframe, despite a resurgence in the automobile sector, which intensified the overall demand fundamentals. The Chinese market deteriorated as a result of the dual energy control policy, but it improved by the end of the quarter.
Europe
During the fourth quarter of 2021, BASF, a major worldwide player, raised prices for butanediol and derivatives in Europe. Due to production disruptions at a major producer's facility, as well as lower imports from Asia, BDO supplies remained limited in Q4. The resumption of downstream operations in November sparked active restocking, resulting in a higher demand for BDO derivatives. Players, on the other hand, were cautious about the impact of demand fundamentals and current supply restrictions, keeping the price range in the last weeks of December around USD 2836/tonne Ex-Hamburg.
For the Quarter Ending September 2021
North America
North American market registered an uptrend in the prices of Butanediol during the third quarter backed by the strong demand from downstream segments including Tetrahydrofuran and Polybutylene Terephthalate. In addition, Ida hurricane made landfall in August across the Gulf Coast of the USA that led to the shutdown of many production plants due to power outages in the region. BASF, a major producer of BDO shut down its production plant in Louisiana as a repercussion of hurricane Ida. Hence, due to this climate calamity, disturbance in the logistics led to supply shortages which consequently caused the hike in the prices of Butanediol in the region during this quarter.
Asia
Asian market experienced an exponential rise in the prices of Butanediol (BDO) during Q3 2021, owing to the surged demand from downstream industries and the supply crunches. In China, BDO prices escalated as the supply remained tight throughout the quarter supported by the curtailment in the production. Moreover, price hike was also driven by the congestion on several ports in China. FOB Qingdao Butanediol monthly average prices stood at USD 4342/MT in September showcasing a hike by USD 692/MT since July. In India, Butanediol prices witnessed a steep climb through the quarter backed by the sturdy demand from downstream sectors and crippled supply from the European region. In addition, excessive freight charges and container shortage during this quarter also sent ripples to the price of Butanediol. Thus, a persistent rise in the BDO prices was witnessed throughout Q3, Ex Mumbai prices settled at USD 5292.93/MT in September.
Europe
In Q3 2021, Butanediol prices soared in the European market following the same trend as other regions. The demand for BDO remained firm in both domestic and international market despite the low rates of production due to the inflation in the natural gas prices that consequently fumed the prices of Butanediol during this quarter. In addition, the exorbitant freight charges across the Europe-Asia and Europe-US interoceanic trade routes and extreme container shortage further contributed to the hike in the pricing trend of BDO in Europe.
For the Quarter Ending June 2021
North America
Butanediol (BDO) market in North America encountered robust demand amidst critical supply shortage. Post freezing fallout in the Gulf of USA, prices of BDO kept tracing upward trajectory due to several operational hindrances and robust demand from downstream sectors like Tetrahydrofuran and Polybutylene Terephthalate. In addition, incidents of supply shortages were also witnessed due to disrupted transportation chains. A major BDO manufacturer, BASF was heard increasing the prices in North America, with effect from 1st April 2021. Therefore, a steep rise by around 30% in prices of Butanediol (BDO) was observed across North America region during Q2 2021.
Asia
Asian market experienced mixed sentiments of Butanediol (BDO) during Q2 2021, as the demand and supply activities varied country over country throughout the quarter. In China, BDO prices escalated till April due to critical supply shortage, as several plants underwent maintenance turnarounds in the country. After gaining tremendous value, Butanediol (BDO) prices declined by more than 30% in May and reached USD 3320/MT till mid- May in China. While in India, BDO prices declined effectively during May and settled at USD 2886/MT, due to the second wave of pandemic in the country, as the demand reduced to a level that compelled traders to sell their stocks at a cheaper rate.
Europe
Following the global market fundamentals, prices of Butanediol (BDO) rose effectively in Europe during Q2 2021. European BDO manufacturers witnessed firm enquiries from Asia, amid an extreme supply crunch. Major manufacturers like Ashland increased their BDO prices for Europe in the month of April, due to continuous rise in demand and limited availability. On the demand perspective, demand from downstream Polybutylene Terephthalate (PBT) manufacturers remained robust throughout the quarter.
For the Quarter Ending March 2021
North America
North American region witnessed critical shortage of Butanediol (BDO) and its derivatives, thus faced extreme difficulties to fulfil the demand from downstream sectors. Extreme cold disrupted the total output of the US gulf and created a huge shortage of almost all the necessary chemicals across the region and globally, as several major producers announced force majeure on their plants under these conditions. Furthermore, the demand from downstream sectors to make PU, THF and GBL remained extremely high throughout the quarter. Meanwhile due to the widened demand and supply gap, BASF increased the prices of BDO and its derivatives prices by USD 337/MT in North America region.
Asia
Demand for Butanediol (BDO) from its downstream derivatives sector remained high, though the production activities were comparatively low. During Chinese lunar holidays, BDO production across the country either hit low levels or were completely shut. Hence after lunar year prices of BDO surged exceptionally and floated from USD 2500/MT to USD 3375/MT within two weeks during February. Meanwhile in India, demand from paints and coating was deemed high while the shortage in domestic supply pushed downstream manufacturers to import. Moreover, record breaking hike in freight prices marked further rise in BDO prices across the region making them double from their previous values.
Europe
During Q1 2021 global market witnessed an extreme shortage of Butanediol (BDO) and its derivative chemicals, and Europe did experience the same. Heavy shortage of BDO, high demand from downstream sectors and halted imports activities caused BDO prices to rise drastically. BASF announced an increment in BDO and its derivative prices by USD 960/MT during March in European region. Meanwhile in Germany, price of 99% BDO hovered around USD 2255/MT during March.
For the Quarter Ending September 2020
Asia
During Q3, BDO supply across Asia was stable after maintenance turnarounds ended in China. However, comparatively reduced run rates maintained the overall supply tightness. BDO prices witnessed an increment in September after persistent stability in July and August on the back of tight supply and robust demand. Cargoes in China were heard trading at around USD 1150/tonne in early August. Disruption in logistics in the Xinjiang region, which accounts for more than 40% of China’s total BDO capacity, continued to hamper supply from late July to August. The news of closure of BASF Idemitsu Co. Ltd.’s (BIC) facility at Chiba, Japan in Dec. 2020 further pressured the supply side. Producer’s margins took a big leap after the three major downstream sectors - polybutylene terephthalate (PBT), polytetramethylene ether glycol (PTMEG) and gamma-butyrolactone (GBL) showed volume growth. Q3 end with optimism that the demand is expected to continue improving in the fourth quarter, as restocking of end-products, particularly in Asia and Europe is likely to boost the consumption of BDO.
North America
BDO players reported upside potential looking at the buoyant demand and sufficient supply in the region. Buyers agreed that since the product availability has reduced compared to Q2 levels, prices have reported a marginal uptick. Demand stayed way below the last year’s levels, pressuring the overall margins that have long stayed unfavorable due to mulling sluggishness over the automotive sector. Traders anticipate that BDO supply is likely to stay intact despite the news of Lycra’s Texas plant turning non-operational by the year end creating a buzz in the regional market. However, players sense that imports from Asia should be available to bridge any demand-supply gaps in the near-to-long term.
Europe
BDO supply remained tight in Q3 due to production outages heard at a leading producer’s facility during September backed by lesser imports from Asia. Market sources were pointing at the considerable increases in spot pricing due to the changing demand fundamentals. Demand started gaining momentum after August due to raised sentiments from the downstream polybutylene terephthalate (PBT) manufacturers who further reported greater enquiries by the automotive producers. Regional demand for PBT shot up in Q3 with a producer reporting 45% increase in demand in September on month-on-month basis. Resumption in downstream operations triggered active restocking during September resulting in greater need for BDO derivatives. Players, however maintained a cautious over the influence of demand fundamentals and prevailing supply constraints, thereby maintaining the price range around USD 2015/tonne in the final weeks of September.
